As your debts increase, the interest rate on your loans and credit cards will eventually increase too. (See more on UK Secure Credit Cards) As these payments increase, many people struggle to make the monthly payments. Late payments attract penalties or fines. In the worst cases, people lose their possessions or their homes. Even if you are in this situation, do not panic because you can always improve the situation. There are several solutions that can help you to get your payments back on track.
Credit Card Debt
Having debt on credit card can easily get out of hand. The interest rates are much higher on a credit card compared to a personal loan or a mortgage. People who are unable to pay off their credit cards quickly end up paying more because the debt increases rapidly. The best thing that you can do is to stop spending on the credit card. While this tactic will not pay down on the debt, it gives you an opportunity to redeem yourself. Start paying down on the credit card bill, but pay more than the minimum payment. This will allow you to cut down the balance faster and saves you a lot of money in interest.
Student Loan Debt
A lot of people continue to owe on their student loans several years after they finish college. Luckily for many, repayment does not start until you are earning at least £15,795, which is the published figure at the time of this publication. You, however, need to be aware that interest accrues from the date the loan is taken out. The actual payment also increases as your salary does over time. Therefore, you are encouraged to pay more than the monthly minimum payment if you can afford it.
Even if you are not earning £15,795 annually, you can also make voluntary payments, which enables you to pay off that student loan faster. If you cannot keep up with the repayment schedule, you should urgently speak with the Student Loans Company. A debt counsellor may also be helpful in assisting you with readjusting your finances so that you can make the payments.
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